Guests: Tom Ruggie, ChFC®, CFP®,  the founder and CEO of Destiny Family Office, which is a billion-dollar-plus AUM firm that specializes in helping high-net-worth clients manage every aspect of their financial lives

In a nutshell: Sports memorabilia, art, jewelry, vehicles, cryptocurrency — these may not be “traditional” asset classes at your firm. But, to a growing segment of clients and prospects, these investments are almost as important as their 401(k)s. Advisors who learn how to incorporate these and other emerging asset classes into Life-Centered Financial Plans will be offering a valuable service that sets them apart — especially in the eyes of high-net-worth individuals.

On today’s show, Tom Ruggie discusses how he  blended his passion for collecting with his professional financial expertise and the transformation of collectibles into a recognized investment category.

.Tom Ruggie and I discuss:

  • The confluence of factors driving the rise in collectibles as investments.
  • How advisors can help clients properly value, insure, and document their collections
  • The tax implications of buying, selling, and trading collectibles.
  • Fractional collectible investments.
  • Including collectibles in estate planning to avoid family disputes.
  • Why anyone holding autographed 1952 Topps baseball  cards should get in touch with Tom!

. Quotes: 

Tom Ruggie on delivering extra value to high-net-worth clients: 

“ If you were truly doing a holistic job for your clients, especially in the high-net-worth market, where a lot of these high-net-worth individuals will have a large collection, execute a plan to make sure that everything that needs to be evaluated with that collection is accounted for. Things such as valuation, insurance, storage, and the succession plan. What ultimately is going to happen with those collectibles? Evaluating my own situation, I realized that I was not on top of this and that I was going to potentially leave a mess for my family. That’s what put me down the path of really evaluating this and putting things out there that could help other collectors and also help other advisors to understand how to treat collectibles, how to evaluate them, and how to have the discussion about this with their clients.”

Tom Ruggie on integrating collectibles into a holistic plan:

“I  would learn the basics of not a specific collectible, but really all collectibles. What are the things you should have basic knowledge of? What are the things you should be asking? What are the relationships that you should have to help your client out? Where an advisor is going to really benefit is having the ability to talk holistically about the client’s overall situation. The more you can do to assist a client in all endeavors, the better advisor you’re going to be, the better client following that you’re going to have. If your goal as an advisor is to work with high-net-worth individuals, you want to do more than offer products, more than just handle investments. You want to be a true advisor to your clients and build that relationship.”

Tom Ruggie on the future of collectibles as investments:

“The big firms, the J. P. Morgans and UBS’s of the world, they have collectibles divisions within their firms to help high-net-worth and ultra- high-net-worth individuals. Is that going to trickle down to the mass of individual advisors? It’s hard to say it. In my opinion, collectibles are going to continue to gather steam. There’s just a lot of things that could be pushing this. People love nostalgia. A pair of the red ruby slippers from “The Wizard of Oz” just sold at auction for over $32 million. Performance has been a big factor. I would categorize myself as a collector first and an investor second, but anything and everything I buy, there’s still a mindset of what’s the appreciation potential on this? We’ve also seen a lot of individuals getting into the collectibles market that don’t have the passion. They’re getting into it truly for investment purposes. They’re looking to buy items they feel are going to appreciate and that has been a big boon to the collectibles market. Then there’s “vintage versus new.” I compare vintage collectibles to blue chip stocks. And I consider new collectibles more like penny stocks that are very volatile. You buy Babe Ruth and Michael Jordan and Willie Mays and Muhammad Ali items, you’ve got a certain sense that although there can be ebbs and flows in valuation long term, there’s still going to be demand for those, and long term there’s going to be increase in valuation. When you’re buying newer things, there’s a little bit more of a gambling aspect to it. And I think a lot of people that have gotten into collecting over the past several years have more of a gambling mentality. There’s a lot of risk with that, but there could be a lot of return as well.”

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